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VW Dieselgate

And a strategic response

By,
Team-1

History & Issue Clarification [1]


NOx Emission-Diesel Engine Technology
Up to 11 Mio. Vehicles are affected
Affected Diesel Engine variants 1.2l,1.6l,2.0l,3.0l
Communication gap about the usage of defeat devices

VW & Made in Germany Brand image


Global Warming awareness targeting VW

Impact
$ 32.48 Bn in Fines/Liabilities
$ 33.37 Bn in Recall Cost
$ 8 Bn in Production Loss
2-4 % Loss in Sales
Stock dropped by 30% in a week and lost 40% market
capitalization
2

Anticipated changes in business environment


Customers

Company Culture

Apologizing for the mistakes


Compensation offered to
affected customers
Recalling the involved vehiclesCost of rework

Reverse brain drainas well as


new (Women) talent
Strong and improved
corporate compliance program
Reorganization:
Decentralizing Responsibilities
Transparent Communication
within the group and with
suppliers

Technological Changes

Regulation Changes

Changing in Portfolio
Adapting new methods to
reduce NOx emissions
1. Exhaust gas circulation
(EGR)
2. Selective Catalytic Reduction
(SCR)
3. Lean Burn NOx absorbers
(Passive or active absorbers)
E-Mobility

Strong regulations
New emission testing
methods

SWOT Analysis
STRENGTHS

Long history
Second largest automobile
market in the world
Reasonable price
Strong presence & growth in
China
Strong 13 brands
Presence in hybrid cars and
motorsports

WEAKNESS

Most cars are not environment


friendly due to emission of NOx
and CO2
Low market share in USA and
India
Defamation & decrease in sales
after diesel gate scandal

OPORTUNITIES

Changing customers needs


Increasing global demand for
bus manufacturing
Acquisition of new companies
Scope of eco-friendly vehicle
manufacturing
Challenges to reduce NOx
emission
Room for social responsibility

THREATS

New emission standards


Strong competitors
New challenges in technical
expertise
Currency fluctuation due to
70% earning of it revenue
outside the euro zone

Objectives
Key Problems

Solution Objectives

- Healing of VW Brand will take time! Short Term

Long Term

Target Market change:

Real time emission status in car cluster [


- Focus on Asian & L.American & African markets Outsourcing of diesel engines
Marketing Budgets to focus Skoda and other brands
Alternative fuel vehicle (Hybrids/Electric)
Empower Risk Management & Audit Team

Accessories to capture Environmental em


- To fortify company & boost internal employee moral
- Anti Global warming campaign
5

References

http://www.theicct.org/sites/default/files/publications/ICCT_NOx-controltech_revised%2009152015.pdf
www.dieselnet.com/tech/engine_egr.php
http://www.sciencedirect.com/science/article/pii/S1110016812000907
http://alstomenergy.gepower.com/
http://www.gotabout.info/swot-analysis-of-volkswagen/
www.strategicmanagementinsight.com/swot-analyses/volkswagen-swotanalysis.html
http://www.forbes.com/sites/sarwantsingh/2015/11/25/dieselgate-scandalwhat-options-does-volkswagen-have-to-get-out-of-thismess/#6f8e5de148c2

Thank you.